$12.5 Million in Food Stamp Fraud Uncovered

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DETROIT, MI – Law enforcement from the FBI Eastern District of Michigan and the State of Michigan swooped down on metro Detroit to arrest 11 people involved in a $12.5 million food stamp fraud investigation.fbi logo

It is alleged owners and employees at several stores where bridge cards are accepted were exchanging benefits for cash and selling items not approved by government assistance programs.

There have been news articles over the years that have highlighted that foreigners come into the United States, set up shop and rip the American public off for millions of dollars.  Six Hamtramck markets, all owned by Bengalis, were raided in this food stamp fraud crack down.

Could these types of operations fund extremist’s from other countries with U.S. money illegally received?  Some commenting online think that it is a possibility.

This current raid would seem to be just the smallest tip of a massive problem that has existed for many years.

Although other Metro Detroit stores in Warren and Detroit were investigated, investigators did not announce any arrests outside Hamtramck.

The U.S. Attorney’s Office said store owners would add a surcharge to the card holder’s purchase, “sometimes in an amount of the cash benefit received.”

The exchange is for cash, sometimes less than the value of the groceries they are willing to purchase, so they can circumvent EBT limits excluding alcohol, tobacco, hot food and other purchases.

Investigators say one store alone exceeded $1 million in fraudulent claims.

U.S. Attorney Barbara L. McQuade along with Michigan Attorney General Bill Schuette made the following announcement on September 23rd, 2014:

McQuade was joined in the announcement by Michigan Attorney General Bill Schuette, Special Agent in Charge Anthony Mohatt, U.S. Department of Agriculture, Office of Inspector General; Special Agent in Charge Paul M. Abbate, Federal Bureau of Investigation; Special Agent in Charge Marlon Miller, U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI); and Col. Kriste Kibbey Etue, Michigan State Police. The agencies are working together to combat fraud against the U.S. Department of Agriculture’s Supplemental Nutrition and Assistance Program (SNAP) food stamp program) and the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC).

Today’s announcement comes at the conclusion of a joint federal and state search and arrest warrant operation that investigated retailers in Hamtramck, Warren, and Detroit who were illegally trafficking in food stamps. The charges allege that store owners and employees allowed SNAP and WIC benefit recipients to use their Electronic Benefit Transfer (EBT) cards to exchange their SNAP or WIC benefits for cash. In return, the stores added a surcharge to the recipients’ withdrawal of SNAP and WIC benefits, sometimes in an amount equal to that of the amount of cash benefit received by the recipient. SNAP and WIC benefit funds are transferred electronically directly to bank accounts managed by the retailers. These transactions totaled an estimated $12.5 million during the investigation.

The following individuals were arrested today and will be appearing in federal court this afternoon:

  • Al Amin Supermarket, 11920 Conant, Hamtramck, owner Moklasur Mukul, age 36, of Hamtramck;
  • Bengal American Grocery, 9800 Joseph Campau Avenue, Hamtramck, manager Mohamed Ali, age 38, resident of Detroit;
  • Deshi Bazar, 12045 Conant Street, Hamtramck, owners Ali Ahmed, age 31, and Nazir Ahmed, age 32, and employee Mustak Ahmed, age 34, all residents of Detroit;
  • Maloncho Greens House, 12133 Conant Street, Hamtramck, owner Azizur Ullah, age 37, of Hamtramck, and employees Mohammed Chadek, age 44,
  • Mohammed Miah, age 38, and Mohammed Amin, age 38, residents of Hamtramck;
  • New Al-Madeena Grocery, 2220-2222 Caniff Street, Hamtramck, owner Dilshad Chowdhury, age 34, resident of Hamtramck.
  • Pay-Less Foods, 11350 Joseph Campau Avenue, Hamtramck, owner Mohamed Ahmed, age 58, resident of Hamtramck;

Other locations in metro-Detroit were also searched as part of the investigation.

“Taxpayers in Michigan fund food stamp programs to provide food for the needy, not to create a commodity to be traded for profit,” McQuade said. “We hope today’s charges will deter other merchants to ensure that food assistance programs are not abused.”

“Michigan families are working harder than ever for every tax dollar,” said Schuette. “Today’s charges should send the message that we will not stand by while tax dollars are being stolen. Enriching yourself at public expense is not only shameful, but compromises the integrity of government and violates the public trust. I would like to thank our state and federal partners for their cooperative efforts to secure justice and fight fraud wherever it is found.”

“This investigation and prosecution should send a strong zero-tolerance message to those individuals engaged in the practice of defrauding taxpayer funded WIC and SNAP programs,” said Anthony Mohatt, Special Agent-in-Charge, USDA-Office of Inspector General. “It should also serve as a warning to all stores, that participate in the WIC and SNAP programs as vendors, that fraud and trafficking (purchasing those benefits for cash) will be vigorously investigated and prosecuted by the USDA-OIG, the U.S. Attorney’s Office, and all its federal, state, and local partners that have a stake in ensuring that fraud is eliminated from taxpayer funded programs.”

“Far from being a victimless crime, the offenders in this investigation brazenly defrauded a combined amount of approximately $12.5 million from taxpayer funded programs,” stated Paul M. Abbate, Special Agent in Charge of the FBI Detroit Field Office. “The SNAP and WIC programs are intended to provide assistance for those in need—not a means of abuse or selfish enrichment. The FBI, along with its federal, state and local partners, remains steadfast in its commitment to root out those who steal from taxpayers and defraud our government programs.”

“The Michigan State Police recognize how important the coordination of law enforcement resources are when working with our federal law enforcement partners,” stated Col. Kriste Kibbey Etue, director of the Michigan State Police. “Bridge Card fraud harms those less fortunate so we are thankful for the support of the USDA and U.S. Attorney’s Office in bringing these cases to justice.”

“Taxpayers fund food stamps as a benefit to those who need assistance,” said Marlon Miller, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Detroit. “When unscrupulous business owners take advantage of these benefits for their own profit, the taxpayer is cheated and the individuals who really need the help also suffer.”

Prosecutions are being coordinated by Assistant United States Attorneys Frances Carlson, Abed Hammoud, Stephen Hiyama, Lee Janice, Karen Reynolds, Erin Shaw, Graham Teall, and Timothy Wyse, and by Denise Hart from the Michigan Attorney General’s Office.

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